The last decade has brought tremendous progress in our understanding of how post-translational histone modifications regulate gene expression. However, our knowledge of how certain histone modifications exert their biological effects on a molecular/biochemical level is far more limited. Methylation of histone H4 on arginine 3 (H4 methyl-R3) by arginine methyltransferases (PRMTs) is critical to the activation of several nuclear hormone receptors and is dynamically regulated in the early embryo. Currently, it is not known how arginine methylation leads to transcription activation as no H4 methyl-R3 binding proteins have yet been identified. I plan to identify how methylation of histone H4 on arginine 3 leads to transcription activation by identifying and characterizing the effector proteins that specifically recognize this modification. I plan to identify protein effectors that are major players in recognizing H4 methyl-R3 on histone tails in human embryonic carcinoma (EC) cells in an unbiased biochemical screen. I will determine the functional roles of the H4 methyl-R3 binding protein(s) in transcription activation through cell based and in vitro assays. I propose to first identify H4 methyl-R3 binding proteins through the use of an unbiased biochemical screen to identify hovel histone-binding proteins from EC cell extract using modified histone-tail peptides. I will determine how the H4 methyl-R3 binding protein(s) function in transcription activation by first identifying the genes regulated during the process of EC cell differentiation. siRNA against the H4 methyl-R3 binding protein followed by microarrays will be employed to determine potential genes activated through arginine methylation. Chromatin immunoprecipitation of the H4 methyl-R3 binding protein followed by hybridization to genomic microarrays will determine genes directly bound by the effector protein. Once candidate genes are identified I will use a reconstituted an in vitro transcription system to determine how the H4 methyl-R3 binding facilitates gene activation. Epigenetic regulation of gene expression pathways play a central role in cell fate determination, and in normal and pathological development. Elucidation of the mechanism of how histone arginine methylation affects transcription activation in embryonic carcinoma cells will improve our understanding of gene regulatory mechanisms governing differentiation and development. These studies may identify new proteins critical to gene activation pathways involved in development as well as possible therapeutic targets for cancer treatment.